Share This Story!

America's 10 fastest-growing economies

According to a recent report, U.S. economic growth is expected to pick up in the coming years. The nation's economy grew by 1.9% in 2013. This year, the economy is projected to grow by 2.7%, and in 2015, it is forecast to grow by another 3.2%.

It's been a slow recovery, but according to a recent report, economic growth is expected to pick up in the coming years. The nation's economy grew by 1.9% in 2013. This year, the economy is projected to grow by 2.7%, and in 2015, it is forecast to grow by another 3.2%.

As nationwide growth accelerates, more and more local economies are expected to grow as well. While as many as 97 local economies shrank last year, the gross metro product (GMP) of only seven metro areas is expected to decline this year. In the case of Shreveport-Bossier City, La., the economy shrank more than 5%. On the other side of the spectrum, the economy of Midland, Tex., grew by 7.5%, the most in the nation. Based on data published by the Conference of Mayors and produced by IHS Global Insight, these are the nation's fastest-growing and fastest-shrinking economies.

Many of the nation's economies that contracted the most do not share much in common. These cities are geographically diverse, located from the Northeast to the Gulf Coast and the Midwest. They also have very different economies. Charlottesville, Va., and Binghamton, N.Y., are home to large universities, while in Decatur, Ill., the largest employers are in the manufacturing sector.

While not all the metro areas with the fastest-growing GMPs in 2013 share the same traits, many are benefiting from the U.S. energy boom. Midland and Odessa, Texas, benefit directly from energy production in their areas, while Fargo, N.D., and Pascagoula, Miss., are hubs of oilfield and shipping, respectively.

An important factor that can boost a local economy is trade, either with other parts of the U.S. or with other countries, Alec Friedhoff, senior research analyst at the Brookings Institution, told 24/7 Wall St. "Most of these places all have similar levels of locally-serving jobs — doctors, dentists, barbers, that kind of thing — but the question is how are these places bringing in [outside] income," Friedhoff said. Midland and Odessa, the nation's two fastest growing economies last year, both produce oil, which is always in high demand, while shipbuilding is a major contributor to the Pascagoula economy.

Local economies often rely on one production or trade sector. As long as the sector is booming, it can be a source of economic and job growth, but there can be a downside to this reliance. Local economies often follow the cycles of large companies manufacturing products for the global markets in their backyards, according to Friedhoff. "If you're a small metro area depending on a vulnerable export sector, once that industry goes, you're in big trouble," Friedhoff said. In one prominent example of this, Caterpillar cut hundreds of jobs in Decatur last year in response to a global slowdown in the mining industry. Decatur's economy shrank by nearly 5% last year, and no metro area had a larger proportional job loss.

In metro areas, where economic growth is strong, jobs frequently follow. Many of the nation's fastest-growing metro areas also had rapid job growth. Both Bismarck, N.D., and Midland, Tex., were among the top 10 cities in each measure. Just one top rated metro area, Trenton-Ewing, N.J., had slower job growth than the U.S. overall. Unemployment was also typically low in many of the fastest growing areas, with all but one having lower unemployment rates than the U.S. November rate of 7%. Also, the four metro areas with the lowest unemployment rates that month were among the 10 fastest growing economies in the nation.

For slumping economies,however, the story was often quite different. Some of the metro areas with the largest GMP drops had extremely high unemployment rates. Among these was Yuma, Ariz., where an eye-popping 30.6% of the labor force was unemployed. Yet, both Lafayette, La., and Charlottesville, Va., had two of the lowest unemployment rates in the U.S. as of November despite their economies contracting last year.

Based on the Conference of Mayors' most recent economic report, produced in conjunction with forecasting company IHS Global Insight (IHS), 24/7 Wall St. identified the metropolitan statistical areas with the largest growth and contraction in real gross metropolitan product during 2013. Figures for 2013 GMP growth are estimates. Employment changes for 2013, as well as forecasts for 2014, are also from the report. Unemployment rates are from the Bureau of Labor Statistics (BLS), are seasonally adjusted and reflect figures from October. We also utilized employment data from the BLS, as well as economic statistics from the Census Bureau's 2012 American Community Survey.

The Trenton area's economy grew at an increasingly fast pace in each of the last three years. The area's GMP growth rate rose from 2.2% in 2011 to 4.2% last year. Employment rose by 2% last year, slightly higher than the national growth rate. However, the area's economic news has not been all positive. The area's GMP growth rate is expected to decrease to 1.5% in 2014, less than the IHS projected U.S. growth rate of 2.7% in 2014. Super Bowl XLVIII, being held at East Rutherford, New Jersey, is expected to benefit many parts of northern New Jersey, as well as New York City. Trenton, however, may not profit as much as other towns despite its relative proximity.

Columbus' economy has had exceptionally strong growth in the last few years. The area's economy grew by nearly 10% in 2012, the fifth fastest rate in the U.S. And although the area's economic growth rate of 4.3% was slower last year, it was still among the fastest rates in the nation. The area is highly dependent on manufacturing, and according to a 2012 report from Economic Modeling Specialists Intl., it highly "exemplifies the intriguing potential, and inherent risks, that come with relying on the manufacturing sector." Engine and motor vehicle parts makers are a huge part of the area's economy, where manufacturing jobs accounted for nearly 20,000 of the 53,000 total jobs as of November.

Cheyenne is Wyoming's capital and its most populous city. While the city's economy grew by a fast 4.4% clip last year, its expansion hasn't been consistent in the last few years. Cheyenne's economy actually contracted by 1.2% in 2011, even as the GMP of more than 260 of the nation's 363 metro areas grew that year. Last year's high growth rate isn't expected to continue this year. IHS Global Insight estimated that the area's output will increase by just 1.1% in 2014, lower than the 2% growth rate estimated for the vast majority of metro areas.

The St. Joseph metro area's economy grew by almost 10% in 2012. And while the area failed to grow at the same pace last year, the unemployment rate in the area, as of November, was just 5.2%, well below the national rate. The area is a major center for agricultural sciences and animal health businesses. According to IHS estimates, construction activity in area is expected to increase substantially in the next few years, while wages are expected to rise steadily as well.

North Dakota has been going through one of the largest economic booms of any state in the last few years due to increased activity in the Bakken formation. Bismarck has reaped the benefits of this boom. The metro area's GMP grew by 8.5% in 2012, the seventh largest growth rate of any metropolitan area that year. As of November, no metropolitan area had a lower unemployment rate than Bismarck, where just 2.4% of the labor force was without a job. According to The Bismarck Tribune, the pace of the oil boom in the region has slowed but is still expanding rapidly. IHS estimates Bismarck's GMP will increase by 3.5% this year, still one of the largest increases of any metro area.

Although on the other side of North Dakota from the Bakken formation, Fargo has also benefited from the state's oil boom. In each of the past two years, the Fargo metro area's economy has grown by at least 5%. Employment growth has been solid as well, at around 3% per year in the last two years, while the unemployment rate in the area is projected to be just 3% in 2014. Casselton, a small town outside Fargo, has become a major hub for oil transportation, which has shifted to trains because the U.S. lacks pipelines to move oil from North Dakota. However, a recent 400,000 gallon oil spill in the town has prompted safety concerns.

While South Dakota has not benefited from the oil boom as North Dakota has, parts of the state still recorded robust growth last year. The economy of Sioux Falls, the state's largest city by population, grew by 5.2% last year, and it is projected to grow another 2.9% this year. One of Sioux Falls' strengths has been its financial sector. Citibank has a substantial presence there, as do several other banks. As of November, 11% of the metro area's jobs were in the finance sector. The city's population has been growing, and Sioux Falls set a city record for construction in 2013 at $588.2 million worth of building permits issued.

Shipbuilding is a major industry in South Mississippi and the Pascagoula area. Located in Pascagoula, Ingalls Shipbuilding claims to be the state's largest manufacturing employer, with 11,000 workers. The U.S. energy boom has benefitted Pascagoula as well. Shipments of liquefied natural gas through the Port of Pascagoula have been rising, although exports are still approved by the U.S. government on a case-by-case basis. Although the area's economy grew by an impressive 6.2% last year, growth has been volatile in recent years. Pascagoula's economy shrank by 5.6% in 2011. Additionally, the unemployment rate remained fairly high, at 9% as of November.

Similar to North Dakota, the energy sector contributed to rapid economic growth in parts of Texas, in large part due to the development of hydrofracking technology. Odessa has been at the heart of the West Texas oil boom, with 2012 drilling activity surpassing early 1980s levels — when the area last experienced a major boom — according to the Dallas Morning News. Employment in the region grew by more than 5% in 2013 alone. In the past 10 years, employment in the mining, logging, and construction sector has roughly tripled.

While they are technically in separate metropolitan statistical areas, Midland and Odessa are less than 25 miles apart. Midland, like Odessa, has reaped the benefits of the West Texas oil boom. According to the Dallas Morning News, the city's population has expanded so rapidly that there is a severe housing shortage. If the IHS estimate for 2014 is correct, the Midland area will have among the top 10 GMP growth rates four years straight. Midland was also the fastest-growing in the past two years. Its GMP grew by 14.4% in 2012 and by 7.5% in 2013. Between November 2009 and November 2013, the number of nonfarm jobs in the metro area increased by 35%, versus just 5.5% for the U.S. overall.